Reference no: EM132567491

A Comparative Income Statement is given below for McKenzie Sales, Ltd, of Toronto:

MaKenzie Sales, Ltd.

Comparative Income Statement

                                                            This Year                       Last Year

Sales:                                            $8,000,000                $6,000,000

COGS:                                                4,984,000                3,516,000

Gross Margin:                                          3,016,000              2,484,000

Selling and administrative Expenses:

Selling Expenses:                                     1,480,000                   1,092,000

Administrative Expenses:                             712,000                        618,000

Total Expenses:                                           2,192,000                  1,710,000

Net Operating Income:                                    824,000                    774,000

Interest Expense                                          96,000                             84,000

Net Income before Taxes                                  $728,000                       $690,000

Members of the company's board of directors are suprized to see that the net income increased by only $38,000 when sales increased by two million dollars.

Question 1: Express each years income statement in common size percentages. Carry computations to one decimal place.

Question 2: Comment briefly of the changes between the two years.